Meanwhile, a spate of broader data, including employment figures that put the jobless rate at below 6 per cent and above-trend quarterly GDP growth, all point to a gradual economic recovery.

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''After all, the unemployment rate is a little below 6 per cent, the economy avoided recession during the GFC, household wealth has grown strongly over the past year, and the Q4 national accounts showed around 'trend' growth in real GDP,'' Mr Boyton said.

''Despite a 'not bad' economy, consumer sentiment is only around its long-run average.''

Photo: Source: Deutsche Bank

Mr Boyton said one reason for the discrepancy was that economists looked at the wrong data.

They should be focusing on changes in living standards, he said.

Deutsche has put together a chart plotting annual change in nominal GDP per person, deflated by consumer price rises, to calculate the change in how much every consumer can buy year for a year.

''This gives us a guide to whether the economy is able to produce higher living standards (positive growth in the chart) or not (negative growth),'' Mr Boyton said.

The result is the economy has been unable to deliver higher living standards for the past two years, and a rise of just 2.6 per cent over the past five years, just marginally better than in the early 1990s when Australia had its last recession.

''This is quite unusual,'' Mr Boyton said, adding that the last time there were back-to-back declines in living standards was during the recessions of the early 1980s and 1990s.

Recent research by the Canberra University's National Institute for Social and Economic Modelling adds to indications that living standards are going backwards.

The economists noted that wages rose by only 0.1 per cent in the December quarter of 2013 versus a 0.7 per cent rise in living costs. The net 0.6 per cent fall in the December quarter meant living standards had dropped for three out of five quarters, the institute said in April.

Meanwhile, international comparisons show that Australians live in one of the world's most expensive countries.